Travelers 2013 Annual Report Download - page 138

Share Repurchases. The Company’s board of directors has approved common share repurchase
authorizations under which repurchases may be made from time to time in the open market, pursuant
to pre-set trading plans meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of
1934, in private transactions or otherwise. The authorizations do not have a stated expiration date. The
timing and actual number of shares to be repurchased in the future will depend on a variety of factors,
including the Company’s financial position, earnings, share price, catastrophe losses, maintaining capital
levels commensurate with the Company’s desired ratings from independent rating agencies, funding of
the Company’s qualified pension plan, capital requirements of the Company’s operating subsidiaries,
legal requirements, regulatory constraints, other investment opportunities (including mergers and
acquisitions and related financings), market conditions and other factors. In October 2013, the board of
directors approved a share repurchase authorization that added an additional $5.0 billion of repurchase
capacity. The following table summarizes repurchase activity in 2013 and remaining repurchase capacity
at December 31, 2013.
Number of Remaining capacity
Quarterly Period Ending shares Cost of shares Average price paid under share repurchase
(in millions, except per share amounts) purchased repurchased per share authorization
March 31, 2013 ................. 3.7 $ 300 $81.01 $1,859
June 30, 2013 .................. 3.6 300 82.99 1,559
September 30, 2013 .............. 9.7 800 82.21 759
December 31, 2013 .............. 11.4 1,000 88.10 4,759
Total ....................... 28.4 $2,400 84.51 4,759
From the inception of the first authorization in May 2006 through December 31, 2013, the
Company repurchased a cumulative total of 390.8 million shares for a total cost of $21.24 billion, or an
average of $54.35 per share.
In 2013, 2012 and 2011, the Company acquired 0.8 million, 0.9 million and 1.4 million shares,
respectively, of common stock from employees as treasury stock primarily to cover payroll withholding
taxes related to the vesting of restricted stock awards and exercises of stock options.
Capital Resources
Capital resources reflect the overall financial strength of the Company and its ability to borrow
funds at competitive rates and raise new capital to meet its needs. The following table summarizes the
components of the Company’s capital structure at December 31, 2013 and 2012.
(at December 31, in millions) 2013 2012
Debt:
Short-term ............................................. $ 100 $ 600
Long-term ............................................. 6,261 5,761
Net unamortized fair value adjustments and debt issuance costs ...... (15) (11)
Total debt ............................................ 6,346 6,350
Shareholders’ equity:
Common stock and retained earnings, less treasury stock ........... 23,986 23,169
Accumulated other comprehensive income ...................... 810 2,236
Total shareholders’ equity ................................ 24,796 25,405
Total capitalization .................................... $31,142 $31,755
Total capitalization at December 31, 2013 was $31.14 billion, $613 million lower than at
December 31, 2012, primarily reflecting the impact of a decrease in net unrealized appreciation of
investments, common share repurchases totaling $2.40 billion under the Company’s share repurchase
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